At Superior Steel, we believe offering the service of supply chain management sets us apart from other purchasers. Read on to learn more about supply chain management and techniques, and see why it is important to us to accomplish the goals of a high level of service and ethics for our customers.
Supply chain management (SCM) is the broad range of activities required to plan, control and execute a product’s flow, from acquiring raw materials and production through distribution to the final customer, in the most streamlined and cost-effective way possible.
The concept of Supply Chain Management (SCM) is based on two core ideas:
- Nearly every product that reaches an end user represents the cumulative effort of multiple organizations. These organizations are referred to collectively as the supply chain.
- While supply chains have existed for a long time, most organizations have only paid attention to what was happening within their “four walls.” Few businesses understood, much less managed, the entire chain of activities that ultimately delivered products to the final customer. The result was disjointed and often ineffective supply chains.
The organizations that make up the supply chain are “linked” together through physical flows and information flows. Physical flows involve the transformation, movement, and storage of goods and materials; they are the most visible piece of the supply chain. Just as important are information flows, which allow the various supply chain partners to coordinate their long-term plans, and to control the day-to-day flow of goods and materials up and down the supply chain.
By managing the supply chain, companies are able to cut excess costs and deliver products to the consumer faster. This is done by keeping tighter control of internal inventories, internal production, distribution, sales, and the inventories of company vendors. Supply chain management is based on the idea that nearly every product that comes to market results from the efforts of various organizations that make up a supply chain. Although supply chains have existed for ages, most companies have only recently paid attention to them as a value-add to their operations.
Companies use various methods to improve the supply chain efficiency. One example is called Six Sigma, which has to do with making incremental improvements systemically for existing processes. This method was introduced at Motorola, and adapted at General Electric. The process steps of Six Sigma include defining, measuring, analyzing, improving, and controlling. The name “Six Sigma” refers to the goal of having the number of defect-free products within a normal distribution be less than six standard deviations, or that 99.99966% of all opportunities to produce a part leads to defect-free products. Six Sigma is accomplished through focusing on customer requirements, using extensive measurement and statistical analysis to understand how work gets done and to identify the root cause of problems (variations), and being proactive in eliminating variation and continually improving the process.
Another method of supply chain management includes reducing the risk that the chain with break down. Supply chain risk management seeks to reduce the supply chain’s vulnerabilities, taking into account all of the supply chain stakeholders and analyzing the risk of failure points. These risks can be natural threats, compromised quality, security, resiliency or risks to product integrity. Techniques for minimizing risk include planning for logistics, finance, or cybersecurity, with the overall goal as ensuring that the supply chain continue in the event of a scenario which otherwise would have interrupted business as usual, resulting in loss of profits.
At Superior Steel, we take pride in our long-term relationships with our supply chain partners, and are constantly working with them to increase their effectiveness. Our purchasing team is committed to finding the very best value, shortest lead time, and highest quality materials for our customers. Give us a call to find out more about how we can help you receive products fast, for less.